What Is Health Insurance That Is “ERISA Compliant?”

With the Combined Appropriations Act of 2021, compliance with ERISA is now a fiduciary duty for private employers who provide health benefits to their employee members.

This summary first hit these internets in an earlier post. But it’s open enrollment! So for reference, here it is:

Employers paying for health insurance is tax exempt. You can pay people in money, or you can pay them in benefits, and when you pay them in benefits you don’t have to pay taxes. In order to make this legal according to the IRS, those benefits have to comply with regulations from a series of laws:

First, meet ERISA (The Employee Retirement and Security Act of 1974). The crucial thing to understand about this law is that it’s both employment law and tax law in one:

It sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

What minimum standards, you ask? Great question! It turns out that as it applies to health plans, the most important rules for minimum standards in an ERISA-covered health plan are the following, thanks to the Affordable Care Act (ACA):

The Affordable Care Act…